Question

Question 25.
(a) Mohan started a business on 1st April, 2017 with a capital of ₹ 10,000 and borrowed ₹ 3,000 form a friend. He earned a profit of ₹ 5,000 during the year ended 31st March, 2018 and withdrew cash ₹ 4,000 for private use. What is his capital on 31st March, 2018 ?
(b) Mahesh started a business with a capital of ₹ 15,000 on 1st April, 2017. During the year, he made a profit of ₹ 3,000. He owes ₹ 2,500 to suppliers of goods. What is the total of assets in his business on 31st March, 2018 ?

Answer 1

a. Capital amounts to Rs 11,000

b. The total assets amounts to Rs 20,500

Explanation:

a. The capital which is on March,31 2018 is computed as:

Capital = Capital amount on April 1, 2014 + Profits made during the year - Drawings

where

Capital amount on April 1, 2014 is Rs10,000

Profits made during the year is Rs 5,000

Drawings is Rs 4,000

• Putting the value above:

= Rs 10,000 + Rs5,000 - Rs4,000

= Rs 15,000 - Rs 4,000

= Rs 11,000

b. The total assets on March 31, 2018, is computed as:

• Total assets = Capital amount on April 1, 2014 + Profit made during the year + Creditors

where

Capital amount on April 1, 2014 is Rs 15,000

Profits made during the year is Rs3,000

Creditors is Rs2,500

• Putting the values above:

= Rs15,000 + Rs3,000 + Rs 2,500

= Rs20,500

You can learn more from here about total assets:

https://brainly.in/question/6906694

You can learn more from here about capital:

https://brainly.in/question/2551657

Answer 2

Answer:

CLOSING CAPITAL IS RS11000.